What new initiatives is the Ministry of Trade and Industry currently involved in? Â Â
CHALABI: The most recent developments happening in Iraq are mainly taking place in the northern region of Kurdistan. The standard of security in Kurdistan is very high. Not a single ally force has been injured, killed, or kidnapped in our region since the collapse of Saddamâ€™s regime. We understand that investment and potential economic activities will not take place in an area that is unstable. The security in Kurdistan helps provide for the stability needed to draw in outside investments. Within the last 4-5 years, the total amount of investments in Kurdistan exceeded $21bn. This is a very good sign if you take into consideration that 10-15 years ago we had nothing. Saddamâ€™s forces destroyed more than 5,000 villages. As a result, we had to start over and rebuild the economy. We focused on infrastructure, education, industry, and agriculture. I believe that we have achieved a very high standard. For example, 10 years ago we did not have any airports or flights coming from northern Iraq. Now we have two very significant airports. We have one in Erbil, the capital, and another one in Sulaumaniyah. The airport in Erbil has the 5th longest runway in the world and can accommodate even the largest of planes. There are daily flights from Erbil and Sulaumaniyah going to the Middle East and all over Europe. Our main partner in trade is Turkey. Only 4-5 years ago the volume of trade between Kurdistan and Turkey was roughly $3bn. Now, this trade volume exceeds $12bn. More than 52% of the total companies who are registered in our country are Turkish. However, we have around 80 registered companies mainly from the United States and the United Arab Emirates. There has been a big rush from the western countries coming to our region for investing purposes.
Which trade relationships are you most focused on expanding or developing further?
CHALABI: We understand that a countryâ€™s economy cannot grow if you only invest in one sector. As a result, we have been investing in all sectors. We are focusing on education, healthcare, infrastructure, communication, construction, as well as, other industries. Over the past 10 years the city of Erbil has grown from a nice small city into a metropolitan one. Roughly 7-8 years ago, the income per capita was around $300. Since then, the income per capita has risen to $6,200. This increase in per capita is significant considering the short period of time of only 7-8 years. We expect to double this within the next 5-7 years. I think we are doing a great job if you take into consideration that our best neighbor in the economic situation is Turkey, where the income per capita is around $10,300. Within the next few years we will have a stronger relationship with Turkey because we will have reached a higher standard. From an educational standpoint, we have gone from only having a single university to 20 universities. A big reform is also taking place for the elementary and secondary school systems. We believe that investing in the mind is important. In the last cabinet, the government decided to invest $100m for higher education. Students who have graduated and received bachelor degrees now want to pursue a masterâ€™s degree. As a result, a budget of a $100m has been spared for them.
Which industries does Kurdistan have a competitive advantage in?Â
CHALABI: Well, as you may know, our region is rich in oil. Through our agreement with Baghdad, the oil of the state travels out of Iraq through the international pipeline. However, we do have industries related to petroleum that are important. We have manufacturing plants that produce construction materials. These factories will produce 7m tons of cement and around 400,000 tons of iron for construction. The majority of the construction projects that are going on are geared towards the development of our infrastructure.
There have been many stories in the international media regarding oil contracts that have been signed directly with Kurdistan. The government of Baghdad has released some information to the public stating that these contracts will not be honored. Can you clarify this situation in terms of where the jurisdiction lies in making these decisions?
CHALABI: To be honest, I am not the minister of oil and petroleum. We do know that there have been some difficulties with regards to jurisdiction over oil contracts. However, if you go back to the constitution, you will find that these difficulties will be taken care of. I am sure that this situation will be clarified by our constitution. Once both sides go back to the basic system, then every problem will be solved.
According to some indications, our economic growth is estimated to be around 8%. Our forecast for economic growth is on par with that of China, Turkey and Brazil. When you take into consideration that the economic growth in Europe is 1.4% and the United States is 2.4%, I believe that 8% is quite respectable.
What is your forecast for growth and development in Kurdistan over the next 2-3 years?
CHALABI: According to some indications, our economic growth is estimated to be around 8%. Our forecast for economic growth is on par with that of China, Turkey and Brazil. When you take into consideration that the economic growth in Europe is 1.4% and the United States is 2.4%, I believe that 8% is quite respectable. We can anticipate this growth because we know that the value of petrol is going to rise. I presume that growth and development in Kurdistan will continue to increase each year for the next 2-3 years.